Valen-strike’s Day

Plus: Temu has a fresh roster of suppliers, thanks to its top rival. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

February 14, 2024

SPONSORED BY HUBSPOT

Good morning. Great job, now get out. Super Bowl LVIII was the most-watched telecast ever, drawing in 123.4 million viewers, and broadcaster CBS charged a record $6.5 million for 30 seconds of ad time. And how did parent company Paramount Global choose to celebrate? By reportedly laying off 800 employees, or roughly 3% of its workforce. In an internal memo to employees seen by CNBC, Chief Executive Officer Bob Bakish offered an explanation only an AI bot could love: "These adjustments will help enable us to build on our momentum and execute our strategic vision for the year ahead." We'd hate to see how many employees would be on the chopping block if Taylor Swift hadn't shown up on Sunday.

CONSUMER Uber, Lyft Drivers to Spend Valentine's Day on Strike Photo by War on Want via CC BY 2.0 Enjoy your Valentine's Day dinner. Just don't drink so much Cab you can't drive home. On Wednesday, thousands of Uber, Lyft, DoorDash, and other app-based gig workers across the US, UK, and Canada plan to go on strike to fight for better pay. In other words, you may not be able to count on doorstep food delivery, either.  The Long and Winding Road (to Profitability) It only took 15 years and billions of dollars in losses (including a $1.8 billion operating loss in 2022), but Uber announced its first-ever annual operating profit last week, earning $1.1 billion. But as its share price climbed to an all-time high, the company's army of independently contracted drivers likely bristled. In the US last year, Uber drivers' average monthly gross earnings fell by more than 17%, according to data analyzed by industry research firm Gridwise Analytics. That comes after a 45-month period between 2018 and 2022 in which ride prices increased 83%, according to a Forbes data analysis, or four times the rate of inflation. Lyft drivers, meanwhile, saw their gross average monthly earnings increase by 2.5% last year. But Lyft drivers earn comparatively less than Uber drivers — $1,058 per month versus $1,409, per Gridwise. That prompted Lyft, facing a driver shortage and a looming earnings call on Tuesday, to announce a guarantee last week that its drivers earn at least 70% of what customers pay per ride.  While the Valentine's Day strike will disrupt one of the busiest days of the year for the gig economy, it's still the slow creep of regulation that likely threatens these companies most: In January, the Department of Labor announced a new rule stating that independent contractors must be re-classified as employees if they are "economically dependent" on a company. The rule is sure to face hot legal challenges, and "economically dependent" is a nebulous term at best. While the vast majority of gig workers only drive part-time, 38% of surveyed gig workers told Gridwise they work to cover gaps or changes in income; 62% said they opt for the work due to its flexible hours, a hallmark of self-employment. Across the Pond: According to the European Commission, as many as 5.5 million gig workers in the EU are misclassified as self-employed. Last week, lawmakers in Brussels finally reached an agreement that will introduce new criteria for judging whether a gig worker is an independent contractor or a full-time employee after two years of drafting and negotiations. But critics say the final bill has been watered down to the point of uselessness. Meanwhile, we're nostalgic for the days of yellow taxis. Written by Brian Boyle

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CONSUMER Temu Picks Up Suppliers Jilted by Rival Shein If they don't want you, join us. Singapore-based fast-fashion giant Shein cut ties with multiple Chinese suppliers last year, and everything-store rival Temu stepped in to pick up the pieces as it reaches for global e-commerce dominance, the Financial Times reported.  Fa Fa Fa Fa Fashion Built on incredibly cheap apparel, Shein has quickly become one of the most dominant clothing retailers on Earth — and it's looking to grow. For months, the company has been preparing for an initial public offering in the US by undergoing something of an extreme makeover.  To clean up its image — which includes accusations of using forced labor, violating workers rights, and Mafia-style intimidation tactics on manufacturers — Shein stopped working with multiple suppliers in southern China after auditors found they'd been violating the company's certification standards, like having a minimum of 800 square meters of factory floor space, the FT reported. With so many suppliers off the Shein gravy train, the offloading has meant an opportunity for China-based Temu: Temu, which is owned by the Nasdaq-listed PDD Holdings, operates more like a marketplace of a wide range of products than a brand-name retailer, so it doesn't have the same requirements as Shein. Plus, if a supplier has excess inventory from a Shein order, Temu is often there to buy whatever is left over.  Business for suppliers isn't much better at Temu, though. One supplier who runs a handbag factory told the FT that his profit margin at Shein was less than 20%, but only about 15% with Temu. And if the product is selling well enough, Temu will order similar products from other factories, forcing suppliers to compete and cut prices. Battling Bezos: Temu may have overtaken Shein in US sales, but it's still not No. 1. After a recent drop in US customers and sales, Temu has been on an advertising blitz here — it aired six commercials during the Super Bowl and offered $15 million in coupons and other giveaways. The goal: surpass Amazon. Bezos's baby still has faster delivery times, but Temu has it beat on prices. One toy factory owner in China told the FT that Amazon asked him to "provide lower-priced products" in the second half of last year as Temu was gaining popularity in the US. It's not every day you see the $1.75 trillion behemoth Amazon start to sweat. Written by Griffin Kelly

FINANCE ESG Hiring Isn't What It Used to Be ESG is drying up faster than the planet it's meant to protect. Data provided to The Wall Street Journal by employment analytics company Live Data Technologies showed that 2023 had six months where the number of people leaving ESG (environmental, social and governance) jobs in the US exceeded the number of people starting them. The Great ESG Disillusionment  The data spanned 360,000 current and former ESG workers at US companies. Among the months where outflows outpaced inflows was December 2023, when 2,897 people were hired into the sector but 3,071 left. That's only a net loss of 174, which doesn't seem like a significant number, but it marks a big gear shift from previous years when companies were eager to hire ESG workers. So why the sudden depression? For starters, investment in ESG is tailing off, as evidenced in Q3 of last year when ESG funds shrank for the first time ever — and there are a couple of reasons why that's happening: We're in an era of wide-scale corporate cost-cutting, and some companies have evidently decided that when they want to eke out as much profitability as possible, ESG is on the chopping block. The firms to shed the most ESG jobs were Meta, Amazon, and Google according to the WSJ, all of which saw giant swathes of job cuts last year (including deep cuts to their AI ethics teams). There has been a political backlash against ESG, largely driven by Republican lawmakers — although not exclusively. The way ESG has been used to configure bonuses for top executives at large companies has drawn rancor from pretty much every corner. The EU Puts Its Foot Down: One criticism of ESG investing is that companies can essentially game the system for themselves, setting targets that are more achievable than the companies disclose and greenwashing their operations while unlocking some financial rewards along the way. Last week, though, the EU set out a new parcel of rules to regulate how companies rate their ESG efforts, so they won't be able to reset their goalposts anymore. Written by Isobel Asher Hamilton

Extra Upside Let them scroll: Judge blocks law requiring social media platforms to obtain parental consent before making accounts for children under 16. America's assembly line: US factory boom favors the poorest counties, study finds. Bon voyage: Carnival to add massive 180,000-ton cruise ship to its fleet.

Just for Fun Gearing up. Ice cold.

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